Kentucky General Assembly Passes New State Budget, See the Highlights Here

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FRANKFORT—After a marathon negotiation session this weekend, the Kentucky General Assembly gave speedy passage to a slew of budget bills that gave raises to judicial employees and restored funding for K-12 education while also reducing safety inspections for mines and possibly prohibiting the commonwealth from funding local implementation of the Affordable Care Act.

House Speaker Greg Stumbo praised the Senate for its willingness to compromise with his chamber, and called the process — including the 14-hour closed-door session of budget talks this weekend — “democracy in its purest form.”

“You saw people of different convictions, different ways to view things,” Stumbo said. “It was democracy in its purest form. But it worked. And that’s what made, to me, all these years here worth spending.”

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House members voted 89-11 to pass the executive branch budget originally unveiled by Gov. Steve Beshear in January. The measure largely preserves much of Beshear’s wishlist. Here are some of the highlights:

$30 million for the Next Generation Kentucky Information Highway, aka “silicon holler,” which aims to provide broadband access in Eastern Kentucky to promote job growth. The amount is half of what the governor initially requested.

Funnels $752.8 million to the Kentucky Teachers Retirement System — up from $650.4 million in the governor’s, but less than that agency’s requested $1.4 billion over the next two years. KTRS officials have warned that if their pensions are not fully funded, then they will begin to accrue higher levels of an unfunded liability due to changes in federal accounting standards.

The state’s debt ratio will be set at 6.70 percent — down from 7.05 percent in versions of the budget drafted by the House and the governor’s office, but up from 6.26 percent from the Senate’s plan. The figure is a ratio of the amount of revenue the state collects versus its outstanding debt obligations. Intends to fully fund the actuarially required contributions to the Kentucky Employees Retirement System and the Kentucky State Police Retirement System.

Provides nearly $6 billion in SEEK funding for K-12 education.

Cuts higher education funding by 1.5 percent, less than the 2.5 percent cut proposed by the governor.

Appropriates $96 million over two years to restore funding for Child Care services. $145.5 million in agency bonds for the Kentucky Community and Technical College System to construct campus projects, supported by a “capital fee” paid for by students at $4 per credit hour in 2015, then $8 per credit hour in 2016, which will cover 75 percent of the project’s cost.

Adds language that would prohibit the state from using general funds to pay for the state’s health insurance exchange, Kynect, the state’s Medicaid expansion, and pretty much anything remotely to do with the Affordable Care Act. The language is largely symbolic, however, due to the fact that the budget only covers fiscal years 2014-2016; the state begins shouldering a portion of the Medicaid expansion beginning in 2017. The governor’s office has declined to comment on this language, as it has not seen the actual budget document yet.

Appropriates an additional $131,500 each year for the Governor’s Scholars Program to augment the number of participating students by 50.